STV shrugs off impact of volatile Scottish advertising market

STV shrugs off impact of volatile Scottish advertising market

By
Greig Cameron

STV chief executive Rob Woodward has downplayed a sharp drop in Scottish advertising revenues in the first months of the year and confirmed the company has a number of broadcast commissions in the pipeline.

Mr Woodward said the relatively small size of the Scottish market meant fluctuations tended to be greater than in the wider, and larger, UK sector.

He said: "The Scottish market tends to be more volatile and you see greater swings than in the national market. Our prediction for the year is we are expecting a much stronger second half, post the General Election, and expecting the Scottish market to mimic the overall UK market. "

STV said Scottish advertising was down 13 per cent in the first quarter and is expected to be 11 per cent down by the end of May.

However Mr Woodward remains confident the market will improve in the second half of the year and end up broadly in line with the UK.

UK national advertising for the media group was up nine per cent in the first three months of the year and is predicted to be five per cent ahead going into June.

STV said its total airtime advertising revenue will be up around three per cent for the period between January and the end of May.

Mr Woodward said digital revenue had grown 33 per cent in the quarter and is likely to be up around 40 per cent in the five months.

At the company's annual general meeting in Glasgow Mr Woodward told investors the business is revamping its STV Player online service with the updated version to be available soon.

He said: "It is particularly the download quality and speed of access to our long form programming. Consumers will notice a considerable difference when we launch the new service."

It is also launching a news app which will consolidate a number of existing local information apps.

Mr Woodward said: "We will end up with an improved consumer proposition. They will still carry hyper local news to cover all corners of the country but based on a single app rather than multiple apps."

Mr Woodward told the meeting the company's local television plans were progressing as expected with the STV Glasgow franchise expected to reach breakeven this year and STV Edinburgh during 2016. He said licences in Ayr, Dundee and Aberdeen are expected to be on air in around one year's time as upgrades to the transmission network need to take place first.

Once those are operational Mr Woodward said the company would operate the five licences as a "mini-network" of television stations.

On the STV Productions arm Mr Woodward stated a number of commissions and re-commissions will be announced over the coming weeks.

While he declined to give specific details he said the announcements will include some entertainment and documentary formats.

Mr Woodward reaffirmed STV's commitment to becoming a producer of drama content, citing its hiring of London based head of drama Sarah Brown, but was cautious on when it may return to that genre.

Asked whether we might see announcement of a new drama this year he said: "It takes a long time. We would love it if we were able to but we are not making any promises."

Mr Woodward and the rest of the board faced a number of questions from shareholders including the provision of the STV Player on satellite and cable networks, possible effects of devo max and the strength of the company's balance sheet.

All resolutions at the AGM were passed.

In an unusual move one shareholder even praised STV's remuneration policy pointing to Mr Woodward's two per cent rise in annual salary, his first since taking charge in February 2007, as proof the company was not excessively rewarding executives.

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